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Thread: When antitrust met eminent domain

  1. #1

    When antitrust met eminent domain

    When antitrust met eminent domain
    S.M. Oliva

    Last week, a judge in Harrisburg, Pennsylvania, dismissed one of the stranger antitrust cases of recent years. The Commonwealth of Pennsylvania sued one of its own political subdivisions in federal court under federal antitrust law. The underlying dispute involves eminent domain. The subsequent litigation demonstrates the dangers of reacting out-of-context to the Supreme Court's decision in Kelo v. New London.

    In March 2005, a privately-owned parking garage near the Harrisburg International Airport was scheduled for seizure by the airport's operating authority, an entity created by seven local governments under state law. The airport invoked eminent domain without articulating a specific use for the garage. According to the garage's owner and Pennsylvania Attorney General Tom Corbett, the airport has no need for the land and simply wanted to eliminate private competition with airport-owned parking facilities.

    The garage had already filed a petition in state court challenging the eminent domain action when Attorney General Corbett filed a federal lawsuit against the airport authority. Corbett said the taking of the garage violated the Sherman Act by attempting to monopolize the parking services market in and around the airport. The airport replied that since it was a subdivision of the Commonwealth, it was immune from antitrust suit under the Supreme Court's decision in Parker v. Brown (1943), which exempts most “state action” from the Sherman Act.

    [...]
    When the government has to sue its own bureaucracy you know you're dealing with a rotten system. I keep being told that the government is more accountable to the public than the free market. It appears the government isn't even accountable to itself! What do you think regular people can do against such a monster?

  2. #2
         
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    Jaws, You see government as a monolithic creature. It ain't so. Its no more one entity than private businesses are and they sue each other all the time. Local governments do all types of things that don't meet state statutes or federal laws (call it illegal if you want) but no one but another government would know about it or have standing in court to oppose it. Governments sue each other all the time, its how a lot of issues are settled. They are mostly trying to protect their own interests. Whether its in the interest of the taxpayers is a whole different issue.

  3. #3
    Quote Originally posted by Senior Jefe
    Jaws, You see government as a monolithic creature. It ain't so. Its no more one entity than private businesses are and they sue each other all the time. Local governments do all types of things that don't meet state statutes or federal laws (call it illegal if you want) but no one but another government would know about it or have standing in court to oppose it. Governments sue each other all the time, its how a lot of issues are settled. They are mostly trying to protect their own interests. Whether its in the interest of the taxpayers is a whole different issue.
    This isn't a government suing another, this is a government suing itself. Its own subdivision, that is nominally under its control. Under whose control is the airport?

  4. #4
    Cyburbian AubieTurtle's avatar
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    You would have to see the charter of the airport authority. It might be a quasi-government agency with no direct oversight from the state. As such, probably the only way to make it do something, other than suing it in court, would be to pass a law changing the charter. These types of stuctures are typically setup to keep meddling fingers out of the pot since the elected officials overseeing it would have a tendency to either influence contracts towards campaign contributors or do other things that gets them votes such as forcing a certain wage above market costs.

    Jaws: Out of curiousity, have you ever been to the Mises Institute?
    As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron. - H.L. Mencken

  5. #5
    Quote Originally posted by AubieTurtle
    You would have to see the charter of the airport authority. It might be a quasi-government agency with no direct oversight from the state. As such, probably the only way to make it do something, other than suing it in court, would be to pass a law changing the charter. These types of stuctures are typically setup to keep meddling fingers out of the pot since the elected officials overseeing it would have a tendency to either influence contracts towards campaign contributors or do other things that gets them votes such as forcing a certain wage above market costs.
    What exactly is the point of having such a quasi-governmental agency as opposed to a purely private company? Isn't having democratic political oversight the whole reason that we need the public sector? So I'm told. If we can't trust the politicians we better eliminate all political intervention entirely.
    Jaws: Out of curiousity, have you ever been to the Mises Institute?
    I don't take trips down to Alabama very often. There's nothing there of much interest except a library anyway.

  6. #6
    Cyburbian michaelskis's avatar
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    I am not sure how it works in PA since it is a commonwealth and all that good stuff. However, there have been cases where a municipality has tried to appeal a decision made by its own zoning board. Additionally, cities and governments get sued every day by someone, so why not another municipality.

    I think that the gap between private and public entities is starting to fill in and it appears that these quoi public entities can be more successful than a strict public entity because if the reduced roll of politics in the equation.

    I do agree that some government agencies and groups are rotten and the system is rotten. A perfect case of this is the continuous downward spiral of the City of Detroit as the city is controlled by corruption. This typically happens when the finances of the city have gotten so out of control that the system it’s self has to change to exist. On the other hand, many other places have phenomenal forms of government that work with the citizens to ensure health, safety and happiness. To say that government is rotten as a broad and general statement is a not only bold, but it is also foolish.
    "A long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. Time makes more converts than reason." - Thomas Paine Common Sense.

  7. #7
    Cyburbian Cardinal's avatar
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    Jaws, from this and other postings you have made I get the impression that you are not very familiar with the structure of government in the United States. We do not have a top-down structure where all lower levels of government are accountable to a higher authority. Instead, there is a division of powers between and within federal, state, regional and local levels of government. An authority, such as an airport authority or a park district or etc., may be entirely independent from the oversight of a city or county. Cities, for the most part, do not report to county or state government. Federal and state statutes may define the scope of powers of other levels of government, but otherwise they are free to act as they see fit.

    The larger issue in your post is a question of when it is improper for government to "interfere with" or to offer services that might otherwise be offered by the private sector. The controversy over municipally-provided wireless internet service is comparable. In economic development we often encounter similar issues. When do our (re)development efforts fill a void in the market and when do they create competition that makes it difficult for the private sector to perform? Housing authorities could very well be another example.
    Anyone want to adopt a dog?

  8. #8
    Quote Originally posted by Cardinal
    Jaws, from this and other postings you have made I get the impression that you are not very familiar with the structure of government in the United States.
    Don't mistake my questioning the legitimacy of the system with a misunderstanding of the system. Why are unnacountable "public" authorities allowed to exist and to avoid the oversight of the body that is supposedly its owner?
    Quote Originally posted by Cardinal
    When do our (re)development efforts fill a void in the market and when do they create competition that makes it difficult for the private sector to perform? Housing authorities could very well be another example.
    If there is a void in the market, only the market can know. To use capital obtained by force instead of on the capital market is not filling a void on the market. For all we know the market had correctly decided that there was no need for such a good to be provided, and all you are doing by using tax money is destroying some good that the market had decided was needed.

  9. #9
    Cyburbian abrowne's avatar
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    Quote Originally posted by jaws
    Don't mistake my questioning the legitimacy of the system with a misunderstanding of the system. Why are unnacountable "public" authorities allowed to exist and to avoid the oversight of the body that is supposedly its owner?
    Cannot fault this line of questioning. Jaws has a point with this example. He is giving everyone what they want - since the most common argument revolves around public control vs private control he is providing a valid counter-example to the supposed wonderful benefits of public ownership and accountability.

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